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    internal rate of control

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    You are evaluating purchasing the rights to a project that will generate after tax expected cash flows of $90,000 at the end of each of the next five years, plus an additional $1,000,000 at the end of the fifth year as the final cash flow. You can purchase this project for $950,000. At this price, what rate of return would you earn on the investment (ask what is the internal rate of return)?
    a. 10.3%
    b. 7.7%
    c. 9.6%
    d. 52.6% ((90*5+1000)/950 -1)
    e. 15%
    f. insufficient information to estimate a return rate

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    You are evaluating purchasing the rights to a project that will generate after tax expected cash flows of $90,000 at the end of each of ...

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    This solution is comprised of a detailed explanation to answer what rate of return would you earn on the investment (ask what is the internal rate of return)?

    $2.49

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